Tag Archives: Display Advertising

Seems like coming up with a value for social media has become a cottage industry, for example, $3.60 Facebook Fan Valuation Is Just the Tip of the Iceberg. These values are often derived from what is paid for online media. So you have to ask, if someone is basing the value of a Facebook fan on the value of impressions generated, what is the real value of those impressions? Because unless this is known, the whole framework is faulty.

Just because you pay $5 / CPM for impressions, does not mean they are worth $5 / CPM, does it? Do people really still have that kind of mentality? Is the price of the media equivalent to its value?

For example, I’m sure you have heard of multi-million dollar campaigns that generate very little lift in sales. Happens frequently in fast food, for example. What is the value of that media? Is it the millions paid?

What really blows my mind about this approach is it’s so offline, so old school PR. Do the folks who put forth these kinds of models believe nothing has changed in 50 years? What happened to the whole rap of online being “different”, that you can’t measure it like offline, blah blah.

Except when it’s convenient to do so?

If you want to know the value of a Facebook fan, why not measure the value of a Facebook fan? Because it’s hard, and would require organizational discipline? Too bad. Substituting the kind of models used in the example above for actually measuring the value of a Facebook fan is misleading at the very best.

When you’re in the business of measuring the effects of Marketing programs, certain patterns begin expressing themselves over and over. One of the oldest in the contribution to success of various parts of a Marketing effort, sometimes called the 60-30-10 rule:

60 percent of success is determined by the audience quality
30 percent of success is determined by the offer
10 percent of success is determined by the creative

Where do these stats come from? Continuous improvement testing. Over the years, if you run a lot of different tests, you just begin to see this pattern. And the pattern holds across a very wide variety of business models – online and offline.

The key takeaway here: audience quality is the most important component of success in a results-oriented Marketing campaign. This is why the CPM’s for niche Magazines, for example, are so high. These Magazines are tremendously efficient marketing vehicles because they have high audience quality, which drives end behavior – results.

And the primary reason the audience quality is so high?

People pay for these Magazines. When people pay for something, they value it with more Attention. Why? Simple.

In a magazine like Hot Rod or Concrete Decor or Vogue, the percentage of content that is interesting to the niche audience is very high. In fact, the Advertising is viewed as content.

Smaller audience, very high quality. Ads work like gangbusters.

Clearly, there are other ways to run a media model. At the opposite end of the media spectrum, there is free.